Monday, May 14, 2007

Senate GOP Ready to Trade Socialism For Drilling Rights?

The state Senate Republican Office sends us a newsletter now and again, warning readers to let go of the handbasket, so to speak, that Democrats are driving to you-know-where (if you said Sacramento I actually meant hell, but close enough). This week's is a little curious:

The Senate considered a bill last week that would prohibit tapping one of Oregon’s cleanest and most valuable natural resources. Senator Frank Morse talks about his experience in one of the most environmentally sensitive countries in the world, where they wisely utilize their natural resources to create wealth for their citizens. Watch here!

OK, go ahead and watch--we'll wait here for you.

What's interesting is not that Republicans are trying to fight Senate Bill 790, which places a three-year moratorium on offshore exploration in Oregon's waters. Anything that might inhibit profits, full steam ahead, is something the state GOP is ready to jump all over. But did you catch Senator Morse's example of how we should be behaving? That's right, Norway--land of the fjord, and when it's not inconvenient for the GOP to say so, pseudo-socialist redistributive democracy. Morse touted the recent production of the Langeled natural gas pipeline, which takes lots and lots of natural gas to more southerly countries of the EU. The implication is that if environment-obsessed Norway can drill for gas in its waters, why can't Oregon? Even more notably, Morse claims that everybody in Norway has health care and a good education--and it's because they are pumping gas out of the seas.

What's the descriptive phrase I'm looking for based on this analysis? Let's go with "reindeer poop" or perhaps "caribou hockey." If you read recent financial reports on the pipeline, you'll discover they got about 42bil in Norwegian kroner from it for the first nine months of 2006 (about $7bil). But operating expenditures were 33bil kroner, meaning a forwardable revenue of 10bil kroner. (There are also still large infrastructure payments to be made on the pipeline itself, but we won't include that as an ongoing cost of business).

So, 10 billion kroner to the government from the Morse-touted Langeled pipeline, which in his view apparently pays for health care and education for everyone! Of course, when you realize that TOTAL tax revenues for the country exceeded 825bil kroner in 2005, the 1.2% from natural gas revenues looks a little paltry to be driving health care and education expenses--I'll guarantee you that Norway isn't paying just $2 billion dollars a year for those programs.

Which is where we arrive at what IS paying for them: taxes. What Morse doesn't say is that the top marginal tax rate on income is about 50-55%, depending on how you calculate it. That's roughly 20 points higher than the top rate in America. What's more, if you review that previous link more closely, it indicates that 22% of all tax revenue comes from PETROLEUM ACTIVITY LEVIES--meaning taxes on production and supply, of course. If Morse is talking about replicating what works in Norway, is he ratifying high income taxes and greatly increased energy taxes, in order to make an offshore natural gas setup work for Oregon?

And if you get down to the bottom of that rather dry finance report, there's this:

The Government will go through the tax system to make changes that will encourage environmental friendly behaviour. Among the changes that will be considered are changes in the vehicle taxation. According to the Gothenburg-protocol the Norwegian emissions of NOx has to be reduced to a maximum of 156 000 tons within 2010. To meet this obligation the Government has announced that it is considering a tax on NOx-emissions. In addition, the Government will propose a national quota system for 2008-2012 and changes in other policy instruments for reducing the emissions of greenhouse gasses.

So let's be clear here: The Republicans are arguing that because it works for Norway, we should do it too. And what specifically is working, according to them? Offshore natural gas drilling, yes--heavily regulated and taxed drilling, to go along with the other high tax rates Norway uses to provide its citizens with the universal health care and education Morse lauds. And you thought Republicans were against universal health care and free college...

So I think we have the makings of a deal here! If a majority of Democrats will agree to defeat SB790, we can assume Republicans will allow us to raise exploration and production taxes (not to mention consumption and ordinary income taxes), so that we can have clean fuel--but also a cleaner environment, healthy families and an educated young citizenry. What say, President Courtney?